Making Business Talk

Making Business Talk

John wants to get in touch with coworker Mary on a pressing business matter. He shoots her an instant message, but he doesn't get a response. He calls her desk phone and leaves voicemail, then tries her mobile phone. Finally, John sends an email or SMS in the hope that she'll read it on her mobile device.

The result? John was never able to reach Mary and lost a sale as a result. Mary now has messages in multiple places that she must retrieve and delete. The problem isn't that John and Mary lack communication devices. Quite the opposite - they have too many ways of communicating and those methods are not unified.

These disjointed applications make communications more complex, leading to frustration and reduced efficiency. And it's only getting worse. Knowledge work is increasingly distributed and virtual: workers are doing it from multiple locations.

The answer is unified communications (UC), in which real-time applications are integrated so individuals can manage all their communications together, in both desktop and mobile environments. UC is certainly moving to the front burner at many companies. According to the 2007 Nemertes benchmark, Building the Virtual Workplace, 79 of 100 enterprises interviewed were planning to deploy unified communications over the next two years.

And most of the building blocks of UC architecture are in use at most companies. Ninety-six per cent of benchmark participants report the use of at least one tool, such as audio, video, Web conferencing, IM or a presence application.

Determining the upfront cost
The challenge for many IT executives is to make the business case. This can be tricky, because purported productivity benefits can be hard to quantify. However, business cases do exist. Companies see UC as a way to improve internal communications and increase productivity. There is also the potential for cost savings.

Implementation expenses for each enterprise will vary based on the capabilities of existing and planned systems. Nemertes has gathered cost information on overall spending on collaboration from organisations that have made UC investments.

The data shows that, on average, enterprises are spending $US557 per employee (based on 13 hours at an average loaded hourly rate of $US44 per hour) to implement their collaboration applications, with the majority of dollars spent on installation rather than planning or troubleshooting.

Nemertes also found that organizations tend to underestimate the amount of time they should devote to planning. Companies are often under pressure to implement the new technology - whether VoIP or collaboration - so they don't fall behind the curve. When we ask IT executives to provide advice to their peers about these types of projects, they consistently say, "Slow down!"

Getting JITFTE with it
UC deployment has the potential to dramatically improve business activities that involve direct interaction with customers. For example, contact-centre agents receiving calls from customers interested in products can quickly and easily locate subject-matter experts (SME) regardless of location by applying business rules combined with presence information to determine the best person to receive a call. The agent doesn't need to be an SME; rather he needs to have the capability to quickly locate an SME and bring him into the call.

Nemertes has coined the term Justin-time-Fetch-the-expert (JITFTE) to describe this scenario. This model is most applicable for organisations that place a heavy emphasis on getting information to clients, often with geographically dispersed support teams.

In these organisations, effective customer interaction is critical to overall business success. For example, investment managers may need to apprise their clients quickly of events that might affect their portfolios. Community banks might need to answer specific questions about mortgages or loans. Closing a sale might require involvement of an individual with specific vertical or product knowledge who is located elsewhere.

In these scenarios, UC helps improve close rates by giving sales teams better access to support resources via the use of presence. Mobility services make people available anywhere, anytime. Salespeople can find SMEs quickly to help close a sale.

Presence-enabled UC virtualises corporate resources, helping individuals find the experts they need regardless of location and quickly include them in a call, Web conference, videoconference or audio bridge.

The goal of this approach is to determine if UC technologies can speed the process, leading to such tangible benefits as increased sales or higher customer retention and satisfaction rates. Take a professional services firm that bids on 75 projects a year and has a typical close rate of 75 per cent, for an annual revenue stream of $8,437,500. If the firm is able to apply UC technologies to close just 1 per cent more business in a year, the tangible benefit is $112,500. This benefit increases rapidly as close rates improve, with a 5 per cent increase in close rates providing a benefit of $562,500.

Given the high rate of adoption of elements of UC, such as VoIP and IM, models such as JITFTE provide incentive for enterprises to begin to integrate those applications to provide a UC experience to their customers.

One non-IT-related professional services firm said UC helps its mobile employees become more productive, which translates into more billable hours - an estimated $20,000 more per individual.

The communications-enabled business process
Deployment of unified communications can set the stage for companies to improve business processes by integrating communications services with enterprise applications. Integration using standard protocols, such as XML-based Web Services Description Language and Simple Object Access Protocol, can transform standalone communications applications into components of a service-oriented architecture.

By taking advantage of these Web Services interfaces, companies can integrate specific business processes with their communications systems. For example, a business event such as a manufacturing alarm, inventory shortage or medical emergency can trigger notification of key personnel, automatic creation of meet-me conferences whether online or real

In one scenario, a shortage in a warehouse could trigger an IM to all product inventory managers, along with a proposed conference-call meeting time, and additional information about the trends leading to the shortage, enabling the organisation to quickly address the underlying causes and re-establish the proper pipelines. In this example, an organisation can reduce the losses associated with an outage by $6250 to $25,000 through faster communication to react to a supply-chain disruption.

Most companies see the benefits in integrating UC with business processes. About 46 per cent of enterprises surveyed are planning to integrate business processes with communications applications, while another 20 per cent are evaluating communications-enabled business processes.

ROI: Justifying investment
Any IT investment must accomplish one of two things: reduce costs or increase revenue. Positive ROI is achieved when either of those values exceeds upfront and ongoing investment costs. Assuming that companies on average can expect to spend roughly $US560 per person on their UC implementations, in an organization size of 10,000 employees, this translates into a need to demonstrate some combination of $US5.6 million in cost savings or increased revenues, typically within a payback period of one year or less.

Sounds like a tall order. But what if you can demonstrate that elimination of phone tag using presence-enabled communications reduces the time workers spend chasing down each other and retrieving voicemail messages by 30 minutes per employee per day?

If you figure that employees make an average of $30 an hour (that includes salary and benefits), this translates into potential cost savings of $15 per day, per employee. That comes to 123 hours per employee, per year (based on 245 workdays in a year), for total savings of $36.75 million, based on our 10,000-employee scenario. Of course, this assumes that the time saved is used for other productive purposes.

So if we assume that a 10,000-person organisation implements UC at a cost of $5.6 million, a savings of 30 minutes per day per person easily justifies the investment. Even if we assume only half of the saved time is reused for productive business activity, we still see a positive return of $15.5 million.

Migration: How to get from here to there
The roadmap for implementing UC will vary greatly within each organisation. One option is to purchase a complete system; another option is to integrate best-of-breed components such as IP telephony systems, IM applications or hosted services, Web conferencing platforms or services, videoconferencing and calendaring/messaging components to create their own architecture.

Most companies we interviewed were adopting an IM-centric approach. That is, they planned to deploy Microsoft Office Communicator or IBM Lotus Sametime as the real-time communications dashboard and integrate other applications into their chosen IM platform. Fortunately, almost all UC application vendors have delivered or announced capabilities to integrate their products with Microsoft or Lotus IM.

Beyond integration of IM, Web/audio/videoconferencing and VoIP, companies can add calendaring applications, enabling presence status to change as someone goes into and out of meetings. Presence status can be displayed in in-boxes, such as within Microsoft Outlook or Lotus Notes, or across other integrated applications, such as mobile clients, shared workspaces or other office applications.

The ability to deliver these capabilities will vary across vendor-product lines.

Finally, enterprises can integrate UC systems with business process applications as described above, either via open Web-services standards or via gateway devices.

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